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Non-traditional companies must carry out a careful assesment of their opportunities before making significant investments in healthcare sector

Frost & Sullivan in its recently released whitepaper, talks about medical technology sectors that has become major growth areas for the companies outside these industries. The prospects of healthcare reform and billions of dollars in stimulus funding allocated to healthcare sector have drawn new competitors to the market. Following the decline in many segments of the domestic manufacturing industry, many manufacturers and services providers who have traditionally not focused on the healthcare and medical technology sectors are currently looking into these markets as their next major areas for growth.

The new entrants include materials, component and OEM manufacturers, finished goods manufacturers in non-healthcare sectors, information technology companies, contract manufacturers, consumer goods companies, and distributors and retailers, among others. Corporate giants such as Google, Intel, Delphi, Microsoft, Wal-Mart, Procter & Gamble, and others have targeted healthcare as a critical sector for future expansion.

"In most cases, these companies see an ability to leverage their strengths to tap into a market with strong fundamentals – an aging population, consistent growth and the ability to reward innovation," explains Charlie Whelan, Director of Healthcare Consulting for Frost & Sullivan . "While the ultimate fate of healthcare reform is still to be determined, it will likely result in the expansion of healthcare services to millions of new consumers of medical goods and services."

The stimulus bill which includes billions of dollars devoted to healthcare information has encouraged these companies to get in to the new area of healthcare. The healthcare reform has provisions for healthcare information technology as well as improving healthcare infrastructure, expanding services to underserved communities, and funding new medical research. The debate over healthcare reform has also put a spotlight on the challenges facing our healthcare system, which has encouraged companies to focus their energies on developing solutions to those problems.

It is true that the healthcare industry has many attractions to go behind. But non-traditional companies before entering healthcare market, must carry out a careful assesment of of their opportunities before making significant investments in this complex market. The healthcare industry is intensely regulated, litigious, and heavily controlled by insurance reimbursement guidelines. Distribution and purchasing pathways are also complex, but the diversity of the healthcare and medical technology marketplace creates opportunity.

"Companies with a fresh, outside perspective will be invaluable to improving healthcare delivery and producing the next generation of medical technology," adds Whelan. "The enormous demand for new technology and solutions to address both the clinical needs of patients and the systemic problems of healthcare delivery will create opportunities for companies with the foresight to identify and capitalize on opportunities."

Source: Frost & Sullivan

You can have more discussions about healthcare reform and stimulus package in our Healthcare Reform Group